Dear Fellow Taxpayer

Despite all of the recent changes to the tax law, one of the most important tax breaks for 2010 isn’t being claimed by a surprising number of people:

You can contribute up to $16,500 to your company’s tax-deferred 401(k) retirement plan this year ($22,000 in some cases).  So can your spouse.

For a couple in the 25% tax bracket, that’s an immediate savings of $8,250 that they can keep in their bank account rather than writing a check to the IRS.

Be aware that several tax breaks come with strings attached:

  • Small businesses can get a credit for giving employees health insurance … but not all small firms qualify.
  • Congress slashed the top tax rate on capital gains and dividends to 15% … but not for all gains and dividends.
  • Businesses can deduct 9% of income derived from domestic manufacturing and production … but not from certain activities.

Let’s face it.  Whether you’re a taxpayer or a tax professional, there are so many recent and pending tax law changes that it’s amazingly difficult, and incredibly time-consuming, to keep up.

Kiplinger has just released the new 2010 edition of Kiplinger’s Federal Tax Reduction Kit. Find it online at

“The first step toward change is acceptance. Change is not something you do, it’s something you allow.”  – Will Garcia